MIRA INFORM REPORT

 

 

Report No. :

307963

Report Date :

12.02.2015

 

IDENTIFICATION DETAILS

 

Name :

THE JAPAN STEEL WORKS LTD

 

 

Registered Office :

Gate City Osaki-West Tower, 1-11-1 Osaki Shinagawaku Tokyo 141-0032

 

 

Country :

Japan

 

 

Financial As on :

31.03.2014

 

 

Date of Incorporation :

December 1950

 

 

Com. Reg. No.:

0107-01-019531 (Tokyo-Shinagawaku)

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

Manufactures plastic machines and large casting & forgings bound for electric power and general plants:

 

 

No. of Employee :

4,754

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

Yen 6,062.8 Million

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List – December 31, 2014

 

Country Name

Previous Rating

(30.09.2014)

Current Rating

(31.12.2014)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

JAPAN ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop a technologically advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. For three decades, overall real economic growth had been spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Modest economic growth continued after 2000, but the economy has fallen into recession three times since 2008. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan into recession. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake and the ensuing tsunami in March disrupted manufacturing. The economy has largely recovered in the two years since the disaster, but reconstruction in the Tohoku region has been uneven. Prime Minister Shinzo ABE has declared the economy his government's top priority; he has overturned his predecessor's plan to permanently close nuclear power plants and is pursuing an economic revitalization agenda of fiscal stimulus, monetary easing, and structural reform. Japan joined the Trans Pacific Partnership negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2013 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. The new government will continue a longstanding debate on restructuring the economy and reining in Japan's huge government debt, which is exceeding 230% of GDP. To help raise government revenue and reduce public debt, Japan decided in 2013 to gradually increase the consumption tax to a total of 10% by the year 2015. Japan is making progress on ending deflation due to a weaker yen and higher energy costs, but reliance on exports to drive growth and an aging, shrinking population pose other major long-term challenges for the economy.

 

Source : CIA

 

Company name and address

 

THE JAPAN STEEL WORKS LTD

 

REGD NAME:    Nihon Seikosho KK

MAIN OFFICE:  Gate City Osaki-West Tower, 1-11-1 Osaki Shinagawaku Tokyo 141-0032 JAPAN

                        Tel: 03-5745-2001     Fax: 03-5745-2025

 

                        *.. The is its Muroran Works (Hokkaido)

 

URL:                 http://www.jsw.co.jp/

E-Mail address: info_steel_forging@jsw.co.jp

 

 

ACTIVITIES

 

Mfg of plastics machines, steel castings & forgings

 

 

BRANCHES

 

Osaka, Nagoya, Shizuoka, Fukuoka, Sapporo, other (Tot 21)

 

 

OVERSEAS

 

USA, India, China, Singapore, Indonesia, Philippines, Thailand, Malaysia, Hong Kong, Taiwan (21 locations)

 

 

FACTORIES

 

Muroran, Hiroshima, Yokohama

 

 

CHIEF EXEC

 

IKUO SATO, PRES

 

YEN AMOUNT

 

In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                 A/SALES          Yen 188,719 M

PAYMENTS      REGULAR         CAPITAL           Yen 19,694 M

TREND             SLOW              WORTH            Yen 139,268 M

STARTED         1950                 EMPLOYES      4,754

 

 

COMMENT           

 

MFR OF PLASTIC MACHINES, LARGE STEEL CASTINGS & FORGING. 

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

MAX CREDIT LIMIT: YEN 6,062.8 MILLION, 30 DAYS NORMAL TERMS

 

 

                        Notes: Unit: In Million Yen

Forecast (or estimated) figures for 31/03/2015 fiscal term

 

 

HIGHLIGHTS

 

The subject company is one of world’s leading mfrs of plastic machines and large steel castings & forging bound for electric power & general plants.  Renowned for resin machinery.  Ranked in 2nd group in the field of injection machines in Japan.  Also makes defense equipment including guns, tanks, missile launchers & antiaircraft gun systems.  French nuclear firm, Areva, acquired 1.3% stake in the subject firm and signed a long term purchase contract for large forged-steel parts for nuclear power plants, reported in Nov 2008.  The long term contract likely covers the purchasing of forged-steel parts for 20 or more nuclear reactors between 2012 & 2016, as reported.  Partially amending capacity investment plan for Muroran plant, with focus put on enhancing output of N-power materials to address abundant order backlog.  The company intends to boost new demand for forges & foundries from other sectors than N-power plants and with the development of offshore wind power systems and large wind mills and tie-up with overseas.  It also aims to boost sales of excimer laser annealing equipment for high resolution LCDs and organic ELs.

           

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 188,719 million, a 14.5% down from Yen 220,653 million in the previous term.  This is referred to slumping new orders from thermal and N-power plants.  Export of resin finishing machines to China declined.  The recurring profit was posted at Yen 9,704 million and the net profit at Yen 5,527 million, respectively, compared with Yen 17,108 million recurring profit and Yen 8,281 million net profit, respectively, a year ago.

 

 (Apr/Jun/2014 results): Sales Yen 39,480 million (down 4.5%), operating profit Yen 385 million (down 68.8%), recurring profit Yen 739 million (down 60.9%), net profit Yen 491 million (down 60.3%).  (% as compared with the corresponding period a year ago).

           

For the current term ending Mar 2015 the recurring profit is projected at Yen 10,000 million and the net profit at Yen 6,000 million, on a 6% up in turnover, to Yen 200,000 million.  Operating profit will surge, on recovery in equipment for power plants and continuing surge in injection molding machines. 

 

The financial situation is considered FAIR and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 6,062.8 million, on 30 days normal terms.

 

 

REGISTRATION

           

Date Registered:　Dec 1950

Regd No.:         0107-01-019531 (Tokyo-Shinagawaku)

Legal Status:        Limited Company (Kabushiki Kaisha)

Authorized:           1,000 million shares

Issued:                 371,463,036 shares

Sum:                   Yen 19,694 million

           

Major shareholders (%): Master Trust Bank of Japan T (5.5), Japan Trustee Services Bank (5.0), Mitsui Life Ins (3.8), SMBC (3.3), Mitsui Sumitomo Ins (2.3), Sumitomo Mitsui Trust Bank (2.1), Juniper (2.1), Nippon Steel & Sumitomo Metal (1.7), Hitachi Ltd (1.3), Mitsubishi Heavy Ind (1.3); foreign owners (22.8)

           

No. of shareholders: 29,496

Listed on the S/Exchange (s) of: Tokyo, Nagoya, Fukuoka, Sapporo

 

Managements: Ikuo Sato, pres; Yoshitomo Tanaka, v pres; Yutaka Mizutani, s/mgn dir; Akira Kadota, mgn dir; Nobuaki Shimizu, mgn dir; Kenji Watanabe, dir; Yutaka Higashiizumi, dir; Motonobu Sato, dir

 

Nothing detrimental is known as to the commercial morality of executives.

 

Related companies: Nikko Trading, Nikko Tokki, Nikko Techno, other

 

 

OPERATION

           

Activities: Manufactures plastic machines and large casting & forgings bound for electric power and general plants:

 

(Sales breakdown by Divisions):

Steel Product-related (36%): steel forgings & castings, clad steel products, pressure vessel;

Machinery-related (63%): magnesium process equipment & products, injection molding machine, polyolefin extruders, auto screen changer, compounding extruders, microcellular foam processing technology, reciprocating compressors labyrinth piston type, film & sheet production systems;

Regional Development-related (1%): wind turbine system, commercial building development, Fuchu intelligent park, shopping center, other;

Overseas sales ratio (53%)

           

Clients: [Mfrs, wholesalers] Marubeni-Itochu Steel Inc, Mitsui & Co, JSW Plastics, Nikko Trading, Nikko Techno, Yodogawa Steel Works, Ministry of Self Defense, Mitsubishi Heavy Ind, Toshiba Corp, Sumitomo Corp, Mitsui Bussan Plant Systems, other

No. of accounts: 1,000

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Mitsui & Co Steel Ltd, Allegheny Technologies Japan, Coherent Japan Inc, Shibaura Iron Works, Tanaka Electric Ind, Tetsugen Corp, other.

 

Payment record: Regular

 

Location: Business area in Tokyo.  Office premises at the caption address are leased and maintained satisfactorily.

 

Bank References:

SMBC (H/O)

Mizuho Bank (Tokyo)

Relations: Satisfactory

 

 

FINANCES

 

(In Million Yen)

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2014

31/03/2013

INCOME STATEMENT

 

　

　

  Annual Sales

　

188,719

220,653

　

  Cost of Sales

153,137

176,172

　

      GROSS PROFIT

35,581

44,480

　

  Selling & Adm Costs

26,717

27,799

　

      OPERATING PROFIT

8,864

16,680

　

  Non-Operating P/L

840

428

　

      RECURRING PROFIT

9,704

17,108

　

      NET PROFIT

5,527

8,281

BALANCE SHEET

 

 

　

　

  Cash

　

42,329

51,005

　

  Receivables

 

48,869

51,970

　

  Inventory

 

79,903

59,514

　

  Securities, Marketable

　

　

　

  Other Current Assets

(3,625)

11,535

　

      TOTAL CURRENT ASSETS

167,476

174,024

　

  Property & Equipment

85,672

94,476

　

  Intangibles

 

855

789

　

  Investments, Other Fixed Assets

39,136

34,681

　

      TOTAL ASSETS

293,139

303,970

　

  Payables

 

42,339

42,216

　

  Short-Term Bank Loans

12,292

12,703

　

　

 

　

　

　

  Other Current Liabs

44,217

56,377

　

      TOTAL CURRENT LIABS

98,848

111,296

　

  Debentures

 

10,000

10,000

　

  Long-Term Bank Loans

15,095

17,805

　

  Reserve for Retirement Allw

10,405

9,419

　

  Other Debts

　

19,522

21,081

　

      TOTAL LIABILITIES

153,870

169,601

　

      MINORITY INTERESTS

 

　

　

Common stock

19,694

19,694

　

Additional paid-in capital

5,425

5,425

　

Retained earnings

110,635

107,861

　

Evaluation p/l on investments/securities

4,293

1,475

　

Others

 

(49)

326

　

Treasury stock, at cost

(730)

(413)

　

      TOTAL S/HOLDERS` EQUITY

139,268

134,368

　

      TOTAL EQUITIES

293,139

303,970

CONSOLIDATED CASH FLOWS

 

　

　

 

Terms ending:

31/03/2014

31/03/2013

　

Cash Flows from Operating Activities

　

11,549

23,735

　

Cash Flows from Investment Activities

-5,719

-5,832

　

Cash Flows from Financing Activities

-15,007

-15,259

　

Cash, Bank Deposits at the Term End

　

42,297

50,972

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

　

 

Net Worth (S/Holders' Equity)

139,268

134,368

　

 

Current Ratio (%)

169.43

156.36

　

 

Net Worth Ratio (%)

47.51

44.20

　

 

Recurring Profit Ratio (%)

5.14

7.75

　

 

Net Profit Ratio (%)

2.93

3.75

　

　

Return On Equity (%)

3.97

6.16

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.62.15

UK Pound

1

Rs.94.72

Euro

1

Rs.70.33

 

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

ANK

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

--

NB

                                       New Business

 

--

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.